This is why it isn't easy for VW to name a new CEO

Volkswagen CEO Martin Winterkorn announced Wednesday that he would step down.

VW has been rocked by an emission-test cheating scandal that affects 11 million diesel-engined cars worldwide and has knocked off tens of billions from VW’s market cap in a matter of days.

The planet’s number one automaker will now get a new leader.

But it’s anything but clear who that will be.

Outwardly, VW might look like a great big well-organised German industrial enterprise, but in fact it’s something of a fractious mashup of several different constituencies.

This is the milieu in which Winterkorn operates: part shining example of the German postwar economic miracle, part national car maker, part family business.

The supervisory board represents this palace-intrigue situation. It’s made up of VW Group executives, members of the Porsche family (VW owns Porsche, but it was Ferdinand Porsche who effectively created the company out of the World War II-era “People Car”); the government of the German state of Lower Saxony, where VW is headquartered in the city of Wolfsberg; the Works Council, VW’s labour union; additional union and government officials; and a variety of other directors with ties to the Porsche family.

Here’s top management. Early reports suggest that Porsche CEO Matthias Mueller may ascend to the top spot, but no decision has yet been made:

And here’s the Supervisory Board:

So far, the supervisors have moved rapidly to address the growing crisis.

However, this group of people just got finished with a major management dustup earlier this year that saw former chairman Ferdinand Piech leave the board. Winterkorn at the time looked like the big winner, but the diesel debacle has reversed his fortunes in dramatic fashion.

In many respects, VW had an easier time dealing with its management crisis than it will contending with a leadership change at a time when consumer trust has been destroyed and numerous national governments are now gunning for the company.

The company could send a signal with its choice of a new CEO, creating a lot of distance between the company that deceived customers and regulators for years. But the issue there is that the Porsche family continues to exert tremendous influence over VW’s destiny. That makes it more difficult to bring in an outsider.

In this context, Mueller makes sense. Although his tenure could be temporary, if he get the job.

NOW WATCH: Wreckage from a WWII plane found submerged on the Great Barrier Reef

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.